Outraged Appraisers Owed Money by AMCs!

Outraged Appraisers Owed Money! End The Appraiser Payment Issue!“I am owed $20,000”. “I am owed $2000”. “I am owed $500”. “I am owed $1500”. These are just some of the quotes pulled from various groups, message boards and forums from appraisers all over the country that are owed money for the appraisal services they provided. Services they provided for a Lender, Mortgage Company or Bank through an Appraisal Management Company or AMC as they are known.

What’s an Appraisal Management Company you ask? Well for those that do not know, AMCs have been around a long time. Appraisal management companies (AMCs) are business entities that administer networks of independent appraisers to fulfill real estate appraisal assignments as Agents of lenders. However, it wasn’t until the financial crash of 2008 that they became a permanent fixture in the real estate process due to the HVCC (Home Valuation Code of Conduct now known as DODD FRANK). They were installed as the “Middle Man” between appraisers and lenders to help insure Appraiser Independence and manage the appraisal ordering process. Overnight many of these AMCs were formed and began entering into contracts with the lenders to perform the duties of managing the appraisal process as Agents of the Lenders. Notice how Agents is in bold? I’ll explain shortly.

So now that we have that out of the way let’s get into the real issue here. Appraisers are being left unpaid by Appraisal Management Companies and it’s an outrageous, painful and terrible result of poor legislations and regulations. I will compare this to the recent government shutdown. The outrage of federal workers not getting paid. The outrage of them not being able to pay bills. The outrage of how could this happen. It’s nice to see all the outrage over this, but where is the outrage over appraisers being owed money and not being able to pay their bills? Exactly. There is none because no one knows about it. Let me give you some insight and maybe you too will have some outrage.

First let’s go back in time.

In 2011, an AMC named AppraiserLoft closed its doors unannounced owing appraisers Millions. The scramble began by appraisers to get their monies owed. Some appraisers were successful but most were not. In this case, lenders were collecting the fees from the borrower and passing them along to AppraiserLoft to pay the appraiser. But over time that didn’t happen and the doors closed leaving appraisers not paid for their time and services.

In 2012, an AMC named JVI Solutions closed its doors owing appraisers thousands of dollars. Once again, appraisers scrambled to get their monies owed. However, only some were able to do so. In this case, lenders were also collecting the fees from the borrower and passing them along to JVI Solutions to pay the appraiser. Some appraisers sued the lenders that used JVI and one in particular won his case (no update on if he actually received the monies owed). Many others were left without any payment ever being made.

In 2013, an AMC named Evaluation Solutions filed bankruptcy thus leaving appraisers without payments. JP Morgan Chase was the largest client of Evaluation Solutions and through a court’s decision in Florida the AMC and the bank were absolved of all payments and liabilities to appraisers. Once again, borrowers paid the appraisal fees to the Lender but the AMC failed to make those payments to appraisers.

In 2018, an AMC named CoesterVMS goes silent and leaves appraisers unpaid. Per numerous articles, web searches & message boards, appraisers are owed thousands of dollars, and hoping to get paid. These sources state that CoesterVMS stopped responding to appraisers, was paying them late, owed payments from over 6 months, and apparently is now out of business. Once again, appraisers are scrambling to get paid. Many have called the lenders that used CoesterVMS. Some lenders have paid up. However, most have not. These lenders state they already paid the AMC for the appraisals and are not responsible for any further payments. These predicaments occur as often now as in the past.

There are a couple other AMCS that have ceased business between 2011 to now. Some have tried to settle with pennies on the dollar and some have just disappeared. As inconceivable as it may sound, some just rename themselves and continue to not pay appraisers.

Now let me explain this. Most states have AMC laws and regulate them. Many require an AMC to carry a Surety Bond in order to do business in that state. Some don’t. So referring back, one AMC had a surety bond in North Carolina that was for $25,000. When it was announced that the AMC had canceled the surety bond, appraisers flocked to file against that bond for payments. Within a day or so the bond was exceeded. Yes $25,000 was exceeded in one state. Imagine the filings in other states since the company operated in all 50 states plus Puerto Rico.

So a question comes to mind. If these AMCs are doing this much business and handling this much money, then why are they only required to carry a $25,000 bond? A million seems more reasonable.

This brings me back to the beginning and the word Agent. As an independent appraiser I work for myself. I am considered an independent contractor. According to the laws and regulations, an AMC works as an Agent of the lender. If they are acting as an Agent, (they have a signed agreement), how come the lender is not ultimately responsible for making sure the appraiser, that their Agent obtained, is paid properly and on time? Think about this for a minute. The borrower paid the lender who passed that payment to the AMC to pay the appraiser. However, no payment was made. Who would you hold accountable?

If the lender takes payment from the borrower, and then passes it along to the AMC for the appraisal, then shouldn’t the lender who hired this Agent make sure it is conducting its business in accordance with the signed agreement? I would think so. I’d like to know if my agents were doing things correctly representing me.

Now what can be done here? I have a couple thoughts:

  • The laws need to be redone to make all parties (lenders/AMCS) responsible for paying the appraiser, and in the event the AMC goes under, the lender takes full responsibility.
  • As discussed earlier a larger Surety Bond of at least $1,000,000 should be required.
  • Lenders pay the Appraiser their fee for the report and pay the AMC they hire a separate fee. Separate checks or transactions.
  • Escrow Accounts: money is collected by the lender and put into an escrow account OR if the AMCs do collect money, they take their fee and put the rest in escrow.
  • Do not let AMCs handle the appraisal fees. They should have nothing to do with collecting or paying appraisal fees.
  • Go back to the days when the actual borrower paid the appraiser at the door for the appraisal service. With technology today, the appraiser can be paid quickly via many different payment options without having a 3rd party commingle in the process.

Enough is Enough. It’s time to change the way appraisers are paid for their services. With all the talk of technology, and changing the way appraisals are performed, one would think with said technology appraisers can be paid properly. It’s time to make changes and that time is NOW!

Mark Skapinetz
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Mark Skapinetz

Mark Skapinetz

Mark Skapinetz is a Real Estate Appraiser in Marietta GA with extensive knowledge in Residential Appraising.  He is President for the American Guild of Appraisers (AGA). Featured on Podcasts as well as published interviews in Valuation Review. He is the creator of the 100% Real Estate Appraiser Group, Skap The Appraiser and co-creator of Appraisal Forum & Festival (AppraiserFest).

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30 Responses

  1. Bob Premecz on Facebook Bob Premecz on Facebook says:

    “Go back to the days when the actual borrower paid the appraiser at the door for the appraisal service.” – This would require AMCs to bifurcate (the buzzword now bandied about regarding how some want to further remove the appraiser from boots on the ground) their fees! If borrowers only knew where their “appraisal fee” actually went, thanks to rules created avoid disclosure. This article needs airing outside the appraisal community. Enough with bifurcating. Unless they want the appraiser to bifurcate their liability. Do something wrong, then the appraiser should only be liable for say half the “appraiser fee” paid. Sounds right to me.

    • Avatar don says:

      When I received cash or check from the owner i receipted him with a form kept under my clip board. This tear in half, signed receipt stated WHO my client was and to whom I would deliver the report. I also used an engagement letter also clarifying the client and the job alerting the client of the pending inspection. this stuff was learned the hard way


  2. Avatar Ralph says:

    when you accept payment from a borrower and a service is completed, (the appraisal) and you don’t pay, your a thief, no different than someone robbing a gas station who would get years in prison.  That’s where the owner belongs!

  3. Avatar Don Clark says:

    One solution, and one that is not likely to ever be implemented would be to make an appraisal a service to the property much like a repairman, plumber, roofer, etc can do, and be able to file a lien against the property. As far as I know that is not possible in any jurisdiction. Another way would be to create some method, even if it was a third party escrow company where such fees would necessarily be deposited and could be withdrawn when the work was complete. Otherwise we as appraisers will continue to be at the mercy of clients and third parties who do not pay for our services. There are federal agencies that can help but getting them to do so is as hard as pulling teeth without a pain killer. My motto is “Please pay what you owe me, the world is coming to an end and I don’t want to chase you all over hell to get my money”.

    • Bob Premecz on Facebook Bob Premecz on Facebook says:

      Escrow accounts. You mean AMCs are not required to have one? Who wrote that law? Real Estate Brokerages are required to have one. Why not AMCs?

    • Avatar Wendy Stedman says:

      You are incorrect…the appraisal IS A SERVICE TO THE PROPERTY AND ALWAYS HAS BEEN. I have had to file against the subject property and any service person doing work on real estate is service to that property.

      • Mike Ford Mike Ford says:

        It depends on your state Wendy. Im told by attorneys in my state (CA) that no mechanics lien can be filed for appraiser fees.

        Ud live to be wrong but so far haven’t had any authoritative indication that I am.

        • Avatar don says:

          Mechanic liens major objector was the title Companys. Before appraisers were licensed appraisers, subdividers, the UNLICENSED could only try as a threat, a defense would kick it out!
          After licensing appraisers met all the qualifications. The prequalifying may be a little awkward but some of our clients are A-holes

  4. Baggins Baggins says:

    Inspired article, thank you.

    If amc’s billed for their services separately to eliminate the bias to drive down appraisers fees for profitable gain, one of the primary objections to working with them would be answered. The amc ramp up moved so swiftly. It became immediately obvious to tens of thousands of appraisers there would be no safety net, inadequate representation from these companies. Some of us took the risk, some did not, but everyone nonetheless felt the pain of a sudden onset of a brand new type of widespread pervasive mismanagement of the appraisal assignment process.

    Per Don’s comment. This concept of filing mechanics or contractors liens is valid in some states, but not others. There may be notification requirement rules, process rules, prohibitions against some types of filing. There is sometimes agreement language in onboarding panel documents where the appraiser relinquishes the right to collect in several manners. If billing was managed differently liens would become a sort of a non issue anyways. The problem with liens for lending work is the homeowner is likely to be the most harmed, although they did nothing wrong and already paid. Likely to be double billed which is where consumer lien protection rules often hail from.

  5. Avatar marion says:

    And did not comment to this recent event.

    Clarocity Corporation (TSXV: CLY; OTCQB: CLRYF) (“Clarocity”) announced today that an event of default has occurred in respect of $20,050,000 principal amount of secured debentures which matured and became due and payable January 25, 2019


    Make sure you pay for your background check and credit check so you can extend credit to these companies.

    • Baggins Baggins says:

      Is that still going on? Laughable. Offering stock options on third party middle management ponzi scheme services. What a joke and who actually bought that? Hopefully a different set of regulatory rules apply when offering to investors and the amc’s typical expected game of legally defrauding everyone will not fly. They did nothing different than they do every day in the real estate industry, they just tried that in the investor market instead. I’m done reading those boards and probably will only get re interested if someone is actually going to jail.

      • Avatar don says:

        I believe that all 50 states have county LAW Libraries citing all kind of stuff an independent might run into. Its very quite in all of those libraries where you can get first hand info about your own state. Is the penalty for wrongfully leaning the house appraised higher than the loss on collection. That would be Germain question for an attorney to ask if he were to defend you.

  6. Avatar marion says:

    And maybe the problem solves itself with this. The deadline is only a couple of weeks away. Find your federal representatives.

    12 CFR Part 34

    Notice of proposed rulemaking and request for comment.

    The proposed rule would increase the threshold level at or below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000.

    Comments must be received by February 5, 2019.


    • Avatar Certresidential says:

      There are 275 comments not all of which are available. Other than individual appraiser comments, Does anyone know if the coalitions, AI or ASA addressed their concerns regarding the proposed changes.

      • Baggins Baggins says:

        I’ll make that 276 soon but it’s a shame more people have not commented. I keep telling everyone they need a form letter with a brief few sentence free writing line. That way more people would sign and send, and the powers that be would not be so easily able to count all the letters as one, because each letter would have at least one or two sentences of unique writing. It’s not rocket science and it’s obvious that asking for activism is not as effective as providing a simple avenue and platform for interested persons to simply sign and send. Also this is an indication how few appraisers actually keep up with regulation like they’re supposed to.

      • The ASA, AI, AGA and many others including the one who’s abbreviations I can never remember signed a joint letter drafted by Johnathan Russell of ASA. Third and final draft went out to al last week and is going in before the 4th. I am assuming the same folks that signed first draft that weren’t shown on third draft version I received are also signing again.

        It is an outstanding letter, and as soon as it’s sent it can be posted.

        Most of us also sent our own separate letters, but this was the best I’ve seen by far.

        Suggestions: Oppose on basis that Fed regulatory agencies previous opposed it less than two years ago. Nothing new took place. The sole justification provided was inflation. State its a spurious argument since the original proposed deminimis was only $15K!!!;

        The important thing though is to answer each of their postulated questions. “Yes, there IS increased risk to the taxpayers, etc. and state your opinions why (higher exposure; incorporates almost all residential funding today, increases amount loan officers and commissioned bank officers can certify values on despite being interested parties. Anything else you can think of.

        I didn’t author the draft or I’d post it here for all to get ideas from.

  7. Avatar marion says:

    double post

  8. Mark, most lenders don’t actually pay the AMCs. The AMC collects the full fee that THEY charge up-front by credit card before they ever assign the order to an appraiser. There is no excuse for non-payment of fees IN ADVANCE as had been customary for over 80 years!

    The few lenders that still collect fees do so “purely to control the deal” in an effort from having refinance / new loan business stolen out from under them by unscrupulous competitors.

    FNMA and other lending interests have actively conspired to prevent appraisers from collecting fees at the door as we have traditionally done for over eight decades. The manner that they used to do so, also amounts to price fixing of our fees in violation of the Sherman Anti Trust Act, since it is THEIR loan brokers that quote fees for TRID disclosure. Fees few will ever amend once quoted no matter if adequate for the jobs being requested or not.

    It is this same price fixing that leads to appraisers being hired that may not have competency for the property involved, but being aware of it until they perform their inspections. ALL LENDERS (& their agents) are required under FIRREA and Dodd-Frank to assure that the hired appraiser is competent for each and every specific assignment. Yet they routinely fail to do that beyond assumptive reasoning based on license levels.

    The ONLY solution is to have lenders or AMCs tell their borrowers when they first contact them, that the appraiser must be paid prior to the appointment (credit / debit card) or by agreement to pay at the door via cash or check. Once payment is cleared (or arranged at the door), the appraiser can notify the AMC that appointments have been scheduled. Turn around time deadlines must be adjusted to start from the date payment clears to the appraisers account by the appraisers bank. This would actually speed up appraisals, since the pre-appointment interview would or could also include verification of property characteristics; permit issues, etc.. Things AMCs currently ignore.

    States and feds will never regulate payment to appraisers. Take California for example. They couldn’t care less if appraisers get paid by AMCs. They indicate as much on their website. IF any state cared, then they’d have started off requiring AMCs to have appraiser payment surety bonds of $3 to $5 million. As appraisers you and I have to carry a million dollar policy of E&O to get work.

    • Baggins Baggins says:

      It is the amc industries need to pocket the difference, absent of cost plus billing, driving appraisers fees down in a variable what’s your fee and turn time nature, that leads to these payment policies. Similar to the taxation argument, if Americans had to write a check weekly for all the tax money they actually pay, the jig would be up in a heartbeat. Same for amc’s, if appraisers were aware of how these companies actually operated, far fewer appraisers would be willing to work with them.

      Personally I don’t like collect at the door because it complicates the conversation about client confidentiality and whom ‘owns’ the report. I’m more in favor of clearly separated billing but would actually prefer to get that convenient check in the mail at a later date. I don’t care how long a company takes to pay me, so long as they don’t rake off the top and do pay me the full fee. The old we pay quickly as a justification to bill less, tired and stale, who’s still buying that? The check to checkers I guess. How about we have credit checks as a qualification criteria for being on panel. Logic would indicate if an appraiser can not manage their own finances, they really should not be advising others on anything financial in the first place.

      • Avatar don says:

        I used to offer a receipt for every PAID AT THE DOOR fee which I received. This receipt included WHO was my client and that the property owner was merely extending that credit for my convenience. We each kept a copy. No more escrow officers filing mistakes, cash flow was improved.

        You were correct about liening the subject property for your fee. HOWEVER when licensing came we became contractors or mechanics and under that interpretation we could lien. The threat was sufficient

    • Avatar Certresidential says:

      Is it a matter of insuring payment to Appraisers or a matter of preventing AMCs co-mingling Borrowers money paid for a specific purpose (Appraisal cost) with the AMCs operating budget.

      Borrowers pay those fees with the idea that they ARE paying for a particular service in advance as part of the loan process. Only to find out later that Appraisers are seeking reimbursement for a service they believed paid? The co-mingling of a Borrower’s Appraisal fee is no different than a title company or attorney using deposits and earnest money to subsidize a company’s Christmas party, employee salaries, etc.

      All the posturing and rhetoric regarding protection of the public trust is just that until regulators decide misappropriation and co-mingling of a Borrower’s Appraisal fees by an AMC is an illegal activity. And Lenders should not be allowed to look the other way as theft of service enablers while their agents abscond with Appraisal fees

      It should be illegal to commingle funds – the public trust is being hoodwinked.

      Fix the commingling problems and the appraiser payment fee issues is resolved.

      • Baggins Baggins says:

        That’s right. Eliminate the middle managers ability to drive down the appraisers fee for variable profit and the old what’s your fee and turn time nonsense will stop immediately. Also borrowers would for the first time in 10 years of dealing with amc’s, actually see cost savings from reduced cost of appraisal services. “Nobody would work this hard just to save someone else a dollar and a day.” They do that for self interested purposes in a complex unregulated billing approach which would otherwise be illegal for any other party in the mortgage transaction. I feel like I might possibly have read or even made such a statement before… Junk fees are legal for amc’s and this should never have been allowed in the first place.

  9. Susan Layne on Facebook Susan Layne on Facebook says:

    Why do we put up with this? Isn’t it some sort of Antitrust violation for AMC’s to essentially fix fees at the lowest possible point? Really sick of being a member of an Abused class of citizens!! We’re the key component!!

    • Baggins Baggins says:

      The Sherman Act. Good luck trying to get anyone to enforce RICO on lenders. AG coalitions have done so, but for much larger issues. Appraisers don’t get to claim protected class or discrimination. Appraisers have the choice to work with amc’s or not and there is no requirement to do so. It’s a case of they sold it, the appraisers bought it. The choice is always there to simply say no.

      • That’s not exactly true Baggs. Appraisers in lending do NOT have much choice in who to work for (AMC vs direct lenders) because for so long AMC use was mandatorily required under HVCC with extremely few exceptions.

        I usually choose NOT to work for AMCs. That’s my choice because I have options. Not everyone does.

        The only AMC I work for is the one that stood by me when I had my state complaint. They could have thrown me under the bus and gotten off with a $10K fine to corrupt BREA. Instead they are (still) paying off the better part of our joint $145,000 legal bills. I don’t do a lot of direct work for them, but enough to make the difference between economic survival and modest comfort.

  10. Avatar mdwnlk says:

    AMC’s, FNMA, Freddie and lenders need to be sued in a class action concerning stealing copyrighted data. This will hit the pocketbook of the thieves.

  11. Kitchen Garden Maui on Facebook Kitchen Garden Maui on Facebook says:

    If you can’t afford to lose income I suggest not taking any orders from GOT. I finally got them to pay me but it took months.I heard they didn’t renew their license for 2019 to do business in Hawaii.

    • Baggins Baggins says:

      There is some supposed notion that even though amc’s can’t even manage billing properly, they should be trusted with all these other responsibilities without any such similar concerns. Logic has left the building. Undoubtedly somewhere in the amc community, unlicensed people are using inside information to get ahead on real property transactions somehow with their personal dealings apart from their employer.

      • Avatar don says:

        Lots of persons out their smarter than appraisers. My first year in business (1972) I’d accumulated $10,000 in acc’ts receivable. Wow whoda thunk! I shut down mostly for a month and began collecting. Lots of experience in things i didn’t want to know about. All you collage kids didn’t have to suffer that SHIT, I’ve had a stinking good time ever since.

        Some of my education came from being sued, My clients legal staff said that without a contract I would be OUT any reimbursement costs for my successful defense trial.

        I learned, will you! Once a women divorce attorney was regular client, She would pay me after the job and I thought nothing of it. UNTIL I was invited to her bankruptcy!!!

        Now I use the phrase “I’ll begin the inspection on receipt of my FEE”


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Outraged Appraisers Owed Money by AMCs!

by Mark Skapinetz time to read: 5 min